Many previous studies have shown that the localisation of firms can be an important factor in attracting new foreign direct investment into a host country. What has been missing in this literature thus far, however, is an investigation into the reasons why industry clusters attract firms. We...

This paper presents an empirical study of the effect of foreign multinational companies on the entry of indigenous firms in the fost country, using data for the Irish manufacturing sector. Our starting point is a recent paper by Markusen and Venables (1999), that shows formally that...